Chairman on a weeklong tour of firm’s operations all over Asia
Intel Corp. will invest more than $1 billion in India, signaling the importance of this emerging technology power as a source of revenue and engineering talent, Chairman Craig Barrett said during his weeklong tour of the country.
This investment demonstrates Intel’s long-term commitment and builds on the foundation we have created during our 10 years operating in India, said Barrett. We will grow our local operations, boost venture capital investments and work closely with the government, industry and educators to increase the impact of the country’s information and communications technology (ICT) industry.
Barrett is on a weeklong of visiting Intel sites throughout Asia. He plans to visit China, Singapore and Sri Lanka in addition to India.
Intel’s US$1 billion-plus, multi-year investment roadmap includes plans to invest US$800 million over the next five years to expand business operations in India. Investments will focus on expanding the research and development center in Bangalore that employs 2,800 workers in addition to marketing, education and community programs.
Intel Capital, the chipmaker’s venture capital arm, will invest an additional $250 million in local companies, Barrett told reporters in New Dehli.
Citing the importance of venture capital investments in developing an IT nation, Barrett also announced the creation of the US$250 million Intel Capital India Technology Fund to help stimulate local technology innovation and growth. The investments will focus on Indian hardware and software companies to nurture technology development for local use. The fund will also selectively invest in technology-oriented service companies that target overseas markets.
Along with Intel’s investment of over US$700 million in India over the past 10 years, Intel Capital has provided funding to more than 40 companies in seven Indian cities since it started investing in 1998.
Although Intel has its roots in Silicon Valley, it has been placing more emphasis on foreign markets, from which it draws 75 percent of its sales. Asia in particular has been a focus of growth, representing 50 percent of Intel’s sales. China is now the second-largest source of revenue after the United States.
In June, the chipmaker said it had created a $200 million venture capital fund to invest in China.
To grow its business operations in India, Intel will increase its development activities and staffing at the Intel India Development Center (IIDC) in Bangalore over the next five years. The IIDC focuses on hardware and software engineering for Intel products sold globally since it opened five years ago.
What you are seeing is our conviction and commitment to emerging markets, said Arvind Sodhani, president of Intel Capital. Now, Intel is aiming for India, the third-largest economy in Asia and a prime source of engineering talent. The $250 million venture capital fund for India is the largest sum Intel has committed to a single country, Sodhani said.
India is experiencing a phenomenal amount of growth … and it has lots of entrepreneurial talent, he said.
The money will go into several high-tech sectors, including firms that are developing cell phone and other communications technologies as well as wireless broadband Internet services. We are going to invest in companies that are strategically aligned with our long-term objective, which is to encourage IT and technology adoption in general, Sodhani said.
With its increased presence Intel also announced a program supporting local communities. The Volunteer Matching Grant Program encourages employees to volunteer in local schools.
For every 20 hours an Intel employee volunteers at a school, US$50 will be donated to the institution by the Intel Foundation. Funded solely through donations from Intel, the foundation works to strengthen engineering and computer science education and increase participation in these fields by women and under-represented minorities, improve mathematics and science education for elementary and secondary students, and foster the effective use of computer technology in education.
Investing in education and providing 21st century skills for students are fundamental components to the nation’s continued growth and prosperity, Barrett said.
Intel will increase its efforts over the next three years to train teachers to use technology through the Intel Teach to the Future program. Over the next three years an additional 500,000 teachers will be trained, doubling the number of teachers that have completed the program over the past five years. Intel will also expand its after-school, community-based Intel Learn program to reach students in at least six states through more than 300 community centers.
India has evolved into one of the world’s leading technology centers, Barrett added. These investments, community programs and collaborative efforts will create an environment that fosters innovation and entrepreneurship, and will help bring India’s Technology Vision 2020 to fruition. We look forward to working with government and industry leaders to help generate India’s next phase of growth.
Nathan Brookwood, an analyst at the market research firm Insight 64, called Intel’s latest investments an exclamation point to Barrett’s criticism that the U.S. education system is failing to produce enough engineers.
This is a wake-up call for U.S. educators, Brookwood said. Risto Puhakka, an analyst at the VLSI Research agreed.
If our schools would produce better engineers and more of them, I’m sure Intel would invest more in the U.S. That’s how it all boils down, Puhakka said.
Intel spokeswoman Laura Anderson noted that Intel’s biggest investments have been in the United States. She pointed out that five of Intel’s seven newest chip factories are here.
Failing to invest in fast-growing markets would limit Intel’s future growth prospects, negatively impacting Intel and its entire work force, Anderson said.
Ignoring opportunities abroad would be irresponsible, she said.